What Types of Businesses Create Loyal Customers?

What creates a loyal customer? It's the Business Model. There are three different business models: Low Operating Margin (10% Margins), Medium Operating Margin (20% Margins), and High Operating Margin (30% Margins). The lowest margin businesses, such as gas stations, have customers with low loyalty because they are commodity businesses. The customer solely focuses on price. The highest operating margin companies, such as watch companies, have high margins and high customer loyalty.

When buying a business, the goal is to buy companies with loyal customers. Think of Apple Computers. No matter the economic climate, their users, including me, are always buying their products. They continue to raise their prices, and their customers keep buying their products. Companies such as Apple Computers are phenomenal businesses because their brand creates a solid competitive moat. There are no competitors to Apple. They sit in a blue ocean.

"""Evaluating a Business Requires Effort & Diligence, Buying a Business Requires Patience.""
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